Most of us have faced a problem in opening a bank account in the absence of valid know-your-customer, or KYC, documents, and wished for a simpler documentation process.
The Reserve Bank of India (RBI), it seems, has finally lent ear to millions of such prospective account holders. It has simplified the KYC documentation to make account opening less onerous.
SINGLE DOCUMENT FOR PROOF OF IDENTITY AND ADDRESS
Earlier, as part of the KYC process, one had to submit separate proofs for address and identity. The RBI has done away with this. Now, a single document with photograph and address of the applicant will suffice. Among the documents approved for KYC include passport, driving licence, voter ID card, PAN card, Aadhaar and job card.
NO SEPARATE PROOF FOR CURRENT ADDRESS
If you were new to a place and did not have a valid address proof, opening a bank account was nearly impossible. This problem has been taken care of. Now, customers have to furnish only one address proof (current or permanent) for opening a bank account. All that he is required to do is to make a simple declaration about his/her current address.
'SMALL ACCOUNTS' FOR THOSE WITH NO KYC DOCUMENT
This is probably the best piece of news for students who live away from home and migrant workers. They can now open a 'small account' instead of a full-service account.
A small account can be opened by self-attesting a photograph and giving thumb impression on the application in the presence of a bank employee. Small accounts, as the name suggests, will have restrictions in terms of loan (a maximum of Rs 1 lakh a year), withdrawals (not more than Rs 10,000 a month) and maximum balance (Rs 50,000 at any point of time).
These accounts will be operational only for a year. However, if the account holder provides proof that he/she has applied for a valid KYC document, the account can be extended for another 12 months.
RELAXATION FOR LOW-RISK CUSTOMERS
A person without valid KYC documents but categorised as 'low-risk' can open an account by submitting any of the following-identity card with applicant's photograph issued by a central/state government department, statutory/regulatory authority, public sector undertaking, scheduled commercial bank or public financial institution; or, a letter issued by a gazetted officer with an attested photograph.
Further, if low-risk customers are not able to submit the KYC documents due to genuine reasons, they can do so within six months from the date of opening the account.